Increasing Employer Risks: What Can You Do?

Recently the Equal Employment Opportunity Commission (EEOC) announced that discrimination charges against private employers filed with the EEOC increased by 9% in 2007 - the biggest annual increase since the early 1990s.  According to the most recent U.S. Justice Department statistics, civil rights violation claims have nearly doubled since 1990.  In 2007, the EEOC resolved 72,442 private sector discrimination complaints and recovered approximately $345 million in compensation for those who had filed discrimination charges. 
 
Feeling overwhelmed yet?  Well, the potential risk to employers is actually much higher, considering these numbers do not include claims for breach of contract, intentional infliction of emotional distress, defamation and other employment related torts.  They also neglect to account for claims filed with administrative agencies and state courts, as well as disputes that are resolved through arbitration and mediation.  Defense of these actions is extremely costly - not only in terms of legal fees, but in disruptions to business operations and adverse media attention.  So what can you do?
 
Corporate risk managers are increasingly turning to employment practices liability insurance (EPLI) for protection from such huge liabilities.  Most EPLI policies cover claims of wrongful termination of employment, workplace harassment, and discrimination, and some stretch further to cover a more comprehensive list of wrongful acts.  Nearly all policies cover any amount for which the insured is legally obligated to pay, including defense and investigation costs, settlements, and judgments.  Punitive, exemplary, and multiple damages (including liquidated damages) are now expressly covered under many EPLI policies if otherwise insurable.

At PSM, we advise companies to seriously consider EPLI to protect themselves from the wave of employment-related lawsuits.  If you have questions or are interested in learning more about EPLI, please contact one of PSM’s Human Resources Consultants at 800-967-5515.